Financial markets produced mixed results during the third quarter. Equity markets remained relatively resilient despite continued geopolitical uncertainty, persistent inflation and a meaningful rise in interest rates. The S&P 500 gained approximately 2.3% for the quarter, supported by strong corporate earnings and continued investment related to artificial intelligence. However, market participation narrowed, with large-cap companies outperforming much of the broader market. Small-cap stocks declined during the quarter, while developed international equities posted modest gains.

The underlying economy remained stronger than many investors expected. U.S. economic growth, business investment and consumer spending generally held up, while corporate earnings continued to exceed expectations. AI-related capital spending remained an important source of economic and earnings growth. At the same time, higher energy prices and continued conflict in the Middle East added to inflation concerns and reduced expectations that interest rates would move meaningfully lower in the near term.

Fixed income markets had a more difficult quarter. Treasury yields moved sharply higher as investors reacted to persistent inflation and tighter monetary policy. The 10-year Treasury yield increased from roughly 4.5% at the beginning of the quarter to more than 5.2% at quarter-end. The Bloomberg U.S. Aggregate Bond Index declined approximately 3.4% during the third quarter. Rising yields also pressured municipal bonds and other interest-rate-sensitive assets, although higher yields improve the prospective income available from fixed income investments going forward.

Looking ahead

The macro investment and economic environments remain stable, but increasingly mixed, heading into the fourth quarter. Strong corporate earnings and a resilient economy continue to provide support for equities, but higher interest rates, elevated energy prices, geopolitical uncertainty and increasingly narrow market leadership create reasons for caution. After several years of strong equity performance, the combination of elevated markets and higher bond yields reinforces the value of diversification across asset classes rather than relying on continued leadership from a relatively small group of stocks.

Performance of NCCF Investment Managers in the third quarter 2026

For NCCF’s long-term investment pools, the third quarter is another reminder that equity and fixed income markets behave very differently over shorter intervals. Our diversified approach is intended to participate in long-term growth while reducing reliance on any single market, investment style, or economic outcome.

Most NCCF managers experience mild losses for the quarter, with most at a less than 1% loss. One year rolling returns through the first three quarters of 2026 remain solid in the 7-9% range. Returns remain positive on a rolling, longer-term basis with managers averaging double digit positive returns at the three-year interval. Returns at the five, 10, and 15-year intervals are lower and in line with the broader goal of supporting full endowment spending.

Additional market commentary is available from NCCF’s investment advisor, Graystone Morgan Stanley. For investment information specific to your fund, please contact your Donor Engagement Officer or email support@nccommunityfoundation.org. 

	1-Year	3-Years	5-Years	10-Years	15-Years
Long Term Diversified Pool	7.8%	12.5%	5.7%	7.5%	7.8%
Benchmark – Diversified	11.8%	14.7%	7.5%	8.7%	8.6%
Long Term Growth Pool	9.0%	15.6%	8.2%	9.6%	9.9%
Benchmark – Blended	9.0%	14.6%	7.1%	9.0%	9.6%
All Managers (Net Weighted)	8.4%	13.8%	6.6%	8.3%	8.7%
Benchmark – Broad	11.0%	16.3%	7.9%	9.1%	8.9%
Benchmark – Broad: This benchmark represents a general approach to investment. 70% MSCI All Country World Equity Index , 30% Bloomberg Barclays Aggregate Bond Index
Benchmark – Diversified: This benchmark represents a diversified approach to investment with material allocations to  private equity, private debt, and alternative investments. 24% MSCI ACWI ex US, 20% S&P 500, 10% Russell 2500, 18% Bloomberg Barclays Aggregate Bond Index, 10% HFRI FOF index, 6% MSCI Infrastructure, 6% Cambridge Private Equity, 4% Barclay CTA, 2% Cambridge Private Debt
Benchmark – Blended: This benchmark represents a diversified approach to investment in public markets. 35% R1000, 15% Russell Midcap, 5% R2000, 10% MSCI EAFE Net, 30% Barclays Govt/Credit Bond, 5% FTSE Treasury Bill 3 Month.